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"According to the property agency Homelink, new home prices in Beijing dropped 35 percent in November alone."
"Shanghai property developers started slashing prices on their latest luxury condos by up to one-third. Crowds of owners who had recently bought apartments at full price converged on sales offices throughout the city, demanding refunds. Some angry investors went on a rampage, breaking windows and smashing showrooms. "
"Chinese steel production -- driven in large part by construction -- is down 15 percent from June, and nearly one-third of Chinese steelmakers are now losing money. Chinese radio reports that half of all real estate agents in the southern city of Shenzhen have closed up shop. According to Centaline, more than 100 local government land auctions failed last month, and land sale revenues in Beijing are down 15 percent this year."
"In a few cities, such as coastal Wenzhou and coal-rich Ordos, the collapse in property prices has sparked a full-blown credit crisis, with reports of ruined businessmen leaping off building rooftops; some are fleeing the country."
Wow. How's those Chinese stocks faring?
A review of some of the biggest China ETFs show on average a -15% YTD return. Some are approaching -30% YTD.
I mean, with the experience of home prices collapsing in the US and Britain, were Chinese business leaders and bureaucrats really so stupid as to say that prices can only go up?
The article continues that this is bad for the world economy. A debt-laden China means it won't be able to buy the raw materials that Russia and Canada have been exporting, US and Japanese and European machinery manufacturers won't have demand to fill, and that will exacerbate a European debt crisis and threaten growth in South America. It may even threaten a weakly growing but steadily improving US economy.
Let's hope that asset prices get slashed and there's just bad blood being let immediately at the start to ensure that the pain is short lived. Otherwise we could see the beginning of the first global recession in 80 years.
The one thing I like about fiat currencies is that it accelerates the Georgist principle of real estate speculation and its destructive process. The leaches keep sucking the host dry.
It actually began to pop months ago, but the signs are becoming more appearent now. I've been adamantly predicting the Chinese bubble popping quite some time ago. The world doesn't have the wealth to purchase cheap Chinese crap like before, which is going to hurt demand for commodities in the few countries that were still running strong like Australia and Brazil. Australia is also experiencing tremendous problems in the real estate market. It is looking like the next leg down on this recession. I am not a doomsday naysayer, I am just observing the signs and connecting the dots. Gonna be a rough ride folks.
Anyone else hear the story about business owners going missing? Many apparently had to turn to "other" sources for loans when the monetary system began to tighten up. Well, those "other" sources have come to collect. Many businessmen chose to flee, or commit suicide. Lots of workers with no one to sign the paychecks.
It actually began to pop months ago, but the signs are becoming more appearent now. I've been adamantly predicting the Chinese bubble popping quite some time ago. The world doesn't have the wealth to purchase cheap Chinese crap like before, which is going to hurt demand for commodities in the few countries that were still running strong like Australia and Brazil. Australia is also experiencing tremendous problems in the real estate market. It is looking like the next leg down on this recession. I am not a doomsday naysayer, I am just observing the signs and connecting the dots. Gonna be a rough ride folks.
Anyone else hear the story about business owners going missing? Many apparently had to turn to "other" sources for loans when the monetary system began to tighten up. Well, those "other" sources have come to collect. Many businessmen chose to flee, or commit suicide. Lots of workers with no one to sign the paychecks.
I have been watching Australia as well and what Steve Keen has pointed out is that there was no sub prime fraud as in the US. This is supposed to be a better situation according to those who still think expensive land and housing doesn't make you poor. It actually makes it worse since it embeds itself into the more productive layers. Sub prime did everyone else a favor because its not about the fraud as much as it is about the last one in a ponzi scheme. Australia will have middle class bag holders rather than the under class who had nothing to lose.
Austrlia is commodities and housing. They are going to get creamed I think. What they do have is 4% interest rates and thus room to kick the can and make it worse. It will be interesting to see if they follow the other stooges by curing bloat with more bloat by dropping interest rates.
Actually the market didn't "pop" in China... what the government did was require substantial down payments for buying a house which decreased demand and decreased the prices... what they did was PREVENT a bubble from forming... My Chinese stocks are down but they are still making me money... can't say the same about American stocks which are still in the red...
Actually the market didn't "pop" in China... what the government did was require substantial down payments for buying a house which decreased demand and decreased the prices... what they did was PREVENT a bubble from forming... My Chinese stocks are down but they are still making me money... can't say the same about American stocks which are still in the red...
Perhaps. Time will tell. The article does go on to say that there could be a silver lining and hugely affordable condos and houses will cause more middle-class Chinese to buy houses and unlock their savings (the average savings of a Chinese household is something like 40%). I've said many times before, in order for the Chinese economy to be diversified more, they have to transition to a consumer based society and stop relying on exports.
Sorry to hear your US stocks are performing badly. I chose smartly at the beginning of the year with focuses in certain companies and am up 10% on the year. Admittedly though the broad markets are only barely chugging along. I shifted all my funds in my 401(k) to more stable assets because after the summer runup none of them would do well and I got out. If I had stuck with the average for my age group, I would be down 4% on the year. I'm up 8% instead. Maybe I got lucky. But I knew the price runup in the summer was not justified, except for the companies I privately owned. Except MSFT. What an abortion that was. I cut my losses on that one after two months.
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